As someone who prefers to sleep on the plane, American Airlines’ announcement that it will start testing its in-flight streaming service doesn’t do too much for me. But, as a person who was also once forced on a flight to stare at a screen playing Charlie St. Cloud, I’m actually really excited that the service will now allow customers to stream movies on their WiFi-enabled handheld devices.

American Airlines claims it was the first airline to launch in-flight WiFi, and it’s proudly claiming that it will be the first to test in-flight video streaming. Customers will have the choice to stream movies, which includes new DVD releases, and recently-aired TV shows. This way, you won’t be stuck watching bad network TV pilots that never took off.

For its WiFi service, the airline already partners with Aircell, one of the most popular companies to provide commercial and private aviation services with an in-flight broadband solution. American Airlines’ current WiFi service uses Aircell’s air-to-ground technology by way of antennas attached to the outside of the aircraft allowing for a connection with Aircell’s broadband network. We assume that the new streaming service will need to use a server that’s already onboard the plane so that the connection will be fast enough to handle multiple simultaneous video streams. The service’s development will start this summer and is expected to be ready by 2012.

American Airlines is also planning to include WiFi on the rest of its domestic fleet by the end of the year. In addition, the airline will be adding more powerports. At the moment, the fleets that feature online powerports include the Boeing 777, Boeing 737, Boeing 767-300 Business, and the MD80 fleets. By the end of May, the Boeing 767-200 will have the ports, and by the end of the year, the two remaining fleets will offer the ports.

Pricing for the inflight video streaming service has yet to be announced.